Lawsuit: VA Contracting Changes Could Cut Jobs for the Blind

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In this file photo, members of the U.S. Marines march in the nation's largest Veterans Day Parade in New York City on November 11, 2016 in New York City.

An advocacy group for the blind on Wednesday sued the Department of Veterans Affairs in federal court, alleging the agency ignored a long-standing law when it changed contracting rules that have been used for decades to give jobs to the visually impaired.

The VA's rule change came in the wake of a U.S. Supreme Court ruling last year, which found the agency was required to follow a 2006 law requiring that veteran-owned businesses be given priority. The new contracting rules also are consistent with President Donald Trump's campaign pledge to do more for veterans.

But advocates argue the VA interpreted the court ruling too broadly when it quietly changed the rules in March. They say the VA focused on for-profit businesses owned by veterans while ignoring a separate 1938 law, which also grants priority status to more than 550 nonprofit vendors that employ the disabled and blind to produce and sell goods to the government.

That could have a "disastrous" effect on nonprofits across the U.S. that currently have contracts with the VA through the AbilityOne Program, which was created through the 1938 law. Together, they employ about 800 blind or visually impaired people, many at a handful of facilities in Kansas, Missouri, North Carolina and Indiana, and advocates say those jobs are threatened under the change. Part of what keeps those nonprofits afloat is their ability to charge a rate slightly above market on goods they sell to the VA, advocates say.

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The federal lawsuit was filed by the National Industries for the Blind, also known as NIB, in U.S. District Court in Washington. A spokesman for the VA could not immediately comment.

Dan Kelly, chief operating officer of Industries for the Blind in Winston-Salem, North Carolina, said the rule change came about unexpectedly and caught many by surprise.

"They made the decision without public input," said Kelly, whose nonprofit IFB Solutions employs 50 visually impaired workers, who make eyeglasses for the VA. "I think that's part of the problem."

Advocates say they hope the courts will clarify that veterans and the blind — a demographic with a 70 percent unemployment rate — can both be given preferential status. They say the VA violated federal administrative procedures in March because they did not allow public comment before adopting the rule change. Minority and women-owned businesses that contract with the federal government could also be impacted, they suggested.

"This isn't an issue, from our perspective, of being against veterans. But it is about the issue of the programs being able to co-exist," NIB CEO Kevin Lynch said.

Kelly said 22 percent of his nonprofit's business comes through contracts with the VA, some of which are up for renewal next year. He said there are a number of veteran-owned businesses that would likely be chosen over him under the current rules.

"It's a major hit to our organization," he said. "I think any company would tell you that to take that substantive of a loss would be devastating."

Indianapolis-based surgical supplies manufacturer Bosma Enterprises employs 116 blind people and relies on the VA for more than 95 percent of its business. The nonprofit, which says it brings in $36.4 million a year through VA contracts, also provides services for blind people in the area.

Rhonda Chapman, 53, worked for an insurance company when she lost her sight in 2001. She struggled for five years to find work until she was hired at Bosma, which is named after the father of Republican Indiana House Speaker Brian Bosma. She has since worked her way from the glove production line to running the organization's retail store.